Hibbett (HIBB) investor relations material

Executive summary

• Entered a definitive Merger Agreement with JD Sports on April 23, 2024, for $87.50 per share in cash, expected to close in the second half of 2024.

• Net sales for Q1 FY2025 decreased 1.8% year-over-year to $447.2 million; comparable store sales declined 5.8%.

• Net income was $32.5 million (7.3% of sales), down from $35.9 million (7.9%) in the prior-year quarter; diluted EPS was $2.67 versus $2.74.

• Opened six new stores and closed six underperforming stores, maintaining a total of 1,169 locations in 36 states.

Financial highlights

• Gross margin improved to 35.8% from 33.7% year-over-year, driven by higher average product margin and lower promotional activity.

• SG&A expenses rose to 23.7% of sales (from 21.1%), including $2.6 million in non-recurring merger-related professional fees.

• Operating income was $41.3 million (9.2% of sales), down from $45.9 million (10.1%).

• Inventory was $371.3 million, down 15.2% year-over-year; cash and cash equivalents at quarter-end were $28.7 million.

• $7.5 million was outstanding on a $160 million credit line.

Outlook and guidance

• Management expects continued macroeconomic headwinds, including inflation, higher interest rates, and a cautious consumer, to impact results.

• The company believes existing cash, cash flow from operations, and credit facility access are sufficient to fund operations and capital expenditures for the next 12 months.